Gap Probabilities for Wednesday 7/14/2010
IMPORTANT NOTICE: Futures trading has large potential rewards, but also large potential risk . You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. There is no claim or guarantee that the following information are free of errors,including typos, program bugs, error in modeling the data, internet errors, etc.Trade at your own risk!
These Probabilities Have lead to 100% Winning Trades so far!
Please note that the above factual statement does not mean that it is mathematically possible for this to continue for ever. Having said that, I believe this system will help you gain remarkable advantage over random trades.
For help with using this guide visit Fading Opening Gaps 101.
For trading in general, the best place I have found so far is
LBR Group
headed by market wizard Linda Raschke. Beware that most other sites are scams.
For an overview of today's market see
complimentary video from LBR Group.
LBR Group
headed by market wizard Linda Raschke. Beware that most other sites are scams.
For an overview of today's market see
complimentary video from LBR Group.
Yesterday's Forecast and Review
Yesterday's Forecast:
Before Gap
The high probability areas confirmed by both structure and timing are the H and H-C zones. So I will short if the market opens above the close of yesterday which is 1089.50.
The high probability areas confirmed by both structure and timing are the H and H-C zones. So I will short if the market opens above the close of yesterday which is 1089.50.
After GapAccording to Table - 3, if the market opens above the high(1096 ) or below the low(1084.25) and it closes the gap at 1089.50, then I will enter at the direction of closing the gap.
Yesterday's Review:
Before Gap - ES opened at 1088(C-O zone), below the high probability zones of H and H-C so again no trade was triggered. Only minutes before the open, the market was in those high probability zones. But it decided to discharge its gap potential just before the open. This scenario has happened quite a few times lately and has tempted me to go short before the market open. I need to do a complete study of such situations.
After Gap - The market opened in C-O zone while the high probability zones were H and L.
After Gap - The market opened in C-O zone while the high probability zones were H and L.
Additional Comment: Don't be disappointed that this system has trade-able setups only for some days and even if we do have a setup, it may not triggered because the market does not open in a triggering zone. I expect to see only one or two trades a week and perhaps 5 or 6 per month. This is like digging gold and diamond hidden in the middle of tons of trash. I am working on increasing the number of trades on this system without compromising on the odds. I have some very interesting work in progress. So please keep visiting this page and you will see it will get better and better.
Today's Forecast Summary:
Before Gap
The high probability areas confirmed by both structure and timing are the H-C(1095.50 to 1091) for short and O-L(1088 to 1083.50) for long zones. There is a very good chance that this trade will trigger and I will take this trade.
Stop is 6.5.
The high probability areas confirmed by both structure and timing are the H-C(1095.50 to 1091) for short and O-L(1088 to 1083.50) for long zones. There is a very good chance that this trade will trigger and I will take this trade.
Stop is 6.5.
After Gap
According to Table - 3, if the market opens above the open(1088 ) and it closes the gap at 1091, then I will enter at the direction of closing the gap for 4 additional points.
Stop is 6.5.
Table - 2 Gap Fade Probabilities(based on timing)
According to Table - 3, if the market opens above the open(1088 ) and it closes the gap at 1091, then I will enter at the direction of closing the gap for 4 additional points.
Stop is 6.5.
Today's Data:
ES pivot points:
R3: 1114.00
Fib 1.618: 1103.00
R2: 1102.00
Fib 1.272: 1098.75
R1: 1096.50
High: 1095.50
Close: 1091.00
Pivot: 1090.00
Open: 1088.00
S1: 1084.50
Low: 1083.50
Fib 1.272: 1080.25
S2: 1078.00
Fib 1.618: 1076.00
S3: 1066.00
In the following tables:
H = High
O = Open
C = Close
L = Low
Fib 1.618: 1103.00
R2: 1102.00
Fib 1.272: 1098.75
R1: 1096.50
High: 1095.50
Close: 1091.00
Pivot: 1090.00
Open: 1088.00
S1: 1084.50
Low: 1083.50
Fib 1.272: 1080.25
S2: 1078.00
Fib 1.618: 1076.00
S3: 1066.00
In the following tables:
H = High
O = Open
C = Close
L = Low
Profit Target = Gap Close, Stop = 6.5 points.
| Opening Zone | > H | H-C | C-O | O-L | < L | All | All | |
| Short | Short | Long | Long | Long | Longs | Shorts | ||
| PF | 1.06 | 2.68 | 0.22 | 1.38 | 0.41 | 0.89 | 1.40 | |
| PCT Prof | 58% | 81% | 46% | 67% | 27% | 58% | 67% | |
| Avg Loss | $269 | $167 | $179 | $253 | $227 | $251 | $228 | |
| Net Loss | $2,688 | $500 | $1,250 | $1,263 | $1,813 | $17,588 | $12,075 | |
| Loose | 10 | 3 | 7 | 5 | 8 | 70 | 53 | |
| Avg Win | $204 | $103 | $46 | $174 | $250 | $159 | $160 | |
| Net Win | $2,850 | $1,338 | $275 | $1,738 | $750 | $15,625 | $16,938 | |
| Win | 14 | 13 | 6 | 10 | 3 | 98 | 106 | |
| Avg P/L | $7 | $52 | $75 | $32 | $97 | $12 | $31 | |
| Net | $163 | $838 | $975 | $475 | $1,063 | $1,963 | $4,863 | |
| Total | 24 | 16 | 13 | 15 | 11 | 168 | 159 | |
Table - 2 Gap Fade Probabilities(based on timing)
Profit Target = Gap Close, Stop = 6.5 points.
Table - 3 After Gap probabilities(based on Market Structure)
Copyright © Ali Mohseni 2010 Charts are created using Tradestation software.
| Opening Zone | > H | H-C | C-O | O-L | < L | All | All | |
| Short | Short | Long | Long | Long | Longs | Shorts | ||
| PF | 0.85 | 1.69 | 1.38 | 1.38 | 0.57 | 1.28 | 1.55 | |
| PCT Prof | 53% | 80% | 74% | 62% | 25% | 69% | 72% | |
| Avg Loss | $294 | $290 | $308 | $309 | $300 | $325 | $294 | |
| Net Loss | $10,275 | $4,925 | $10,463 | $2,475 | $2,700 | $29,225 | $26,488 | |
| Loose | 35 | 17 | 34 | 8 | 9 | 90 | 90 | |
| Avg Win | $223 | $126 | $149 | $263 | $513 | $188 | $181 | |
| Net Win | $8,713 | $8,338 | $14,413 | $3,425 | $1,538 | $37,500 | $40,950 | |
| Win | 39 | 66 | 97 | 13 | 3 | 200 | 226 | |
| Avg P/L | $21 | $41 | $30 | $45 | $97 | $29 | $46 | |
| Net | $1,563 | $3,413 | $3,950 | $950 | $1,163 | $8,275 | $14,463 | |
| Total | 74 | 83 | 131 | 21 | 12 | 290 | 316 | |
Table - 3 After Gap probabilities(based on Market Structure)
Profit Target = 4 points, Stop = 6.5 points. Conditional probabilities after the gap is filled.
| Opening Zone | > H | H-C | C-O | O-L | < L | All | All | |
| Short | Short | Long | Long | Long | Longs | Shorts | ||
| PF | 1.87 | 9.20 | 1.83 | 1.02 | 100.00 | 1.59 | 1.41 | |
| PCT Prof | 70% | 92% | 75% | 58% | 100% | 68% | 64% | |
| Avg Loss | $250 | $250 | $250 | $250 | $0 | $252 | $244 | |
| Net Loss | $750 | $250 | $500 | $1,250 | $0 | $8,075 | $9,025 | |
| Loose | 3 | 1 | 2 | 5 | 0 | 32 | 37 | |
| Avg Win | $200 | $192 | $152 | $182 | $200 | $191 | $192 | |
| Net Win | $1,400 | $2,300 | $913 | $1,275 | $600 | $12,800 | $12,700 | |
| Win | 7 | 12 | 6 | 7 | 3 | 67 | 66 | |
| Avg P/L | $65 | $158 | $52 | $2 | $200 | $48 | $36 | |
| Net | $650 | $2,050 | $413 | $25 | $600 | $4,725 | $3,675 | |
| Total | 10 | 13 | 8 | 12 | 3 | 99 | 103 | |
Good luck and please direct any questions or suggestions!
Copyright © Ali Mohseni 2010 Charts are created using Tradestation software.
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